We are delighted to be here today with a very large delegation, including the First Lady and our daughter, who is a student at Stanford, one of the schools with which Beijing University has a relationship. We have six members of the United States Congress; the Secretary of State; Secretary of Commerce; the Secretary of Agriculture; the Chairman of our Council of Economic Advisors; Senator Sasser, our Ambassador; the National Security Advisor and my Chief of Staff, among others.

I say that to illustrate the importance that the United States places on our relationship with China. I would like to begin by congratulating all of you, the students, the faculty, the administrators, on celebrating the centennial year of your university. Gongxi, Beida [Congratulations, Beijing University].

As I'm sure all of you know, this campus was once home to Yenching University which was founded by American missionaries. Many of its wonderful buildings were designed by an American architect. Thousands of American students and professors have come here to study and teach.

We feel a special kinship with you. I am, however, grateful that this day is different in one important respect from another important occasion 79 years ago.

First commencement address

In June of 1919, the first president of Yenching University, John Leighton Stuart, was set to deliver the very first commencement address on these very grounds. At the appointed hour, he appeared, but no students appeared. They were all out leading the May 4th Movement for China's political and cultural renewal. When I read this, I hoped that when I walked into the auditorium today, someone would be sitting here. And I thank you for being here, very much.

Over the last 100 years, this university has grown to more than 20,000 students. Your graduates are spread throughout China and around the world. You have built the largest university library in all of Asia. Last year, 20% of your graduates went abroad to study, including half of your math and science majors. And in this anniversary year, more than a million people in China, Asia and beyond have logged on to your web site. At the dawn of a new century, this university is leading China into the future.

The next generation

I come here today to talk to you, the next generation of China's leaders, about the critical importance to your future of building a strong partnership between China and the United States.

The American people deeply admire China for its thousands of years of contributions to culture and religion, to philosophy and the arts, to science and technology. We remember well our strong partnership in World War II. Now we see China at a moment in history when your glorious past is matched by your present sweeping transformation and the even greater promise of your future.

Just three decades ago, China was virtually shut off from the world. Now, China is a member of more than 1,000 international organisations -- enterprises that affect everything from air travel to agricultural development. You have opened your nation to trade and investment on a large scale.

Today, 40,000 young Chinese study in the United States, with hundreds of thousands more learning in Asia, Africa, Europe, and Latin America. Your social and economic transformation has been even more remarkable, moving from a closed command economic system to a driving, increasingly market-based and driven economy, generating two decades of unprecedented growth, giving people greater freedom to travel within and outside China, to vote in village elections, to own a home, choose a job, attend a better school.

Lifted from poverty

As a result you have lifted literally hundreds of millions of people from poverty. Per capita income has more than doubled in the last decade. Most Chinese people are leading lives they could not have imagined just 20 years ago. Of course, these changes have also brought disruptions in settled patterns of life and work, and have imposed enormous strains on your environment.

Once every urban Chinese was guaranteed employment in a state enterprise. Now you must compete in a job market. Once a Chinese worker had only to meet the demands of a central planner in Beijing. Now the global economy means all must match the quality and creativity of the rest of the world. For those who lack the right training and skills and support, this new world can be daunting. In the short-term, good, hardworking people -- some, at least will find themselves unemployed.

And, as all of you can see, there have been enormous environmental and economic and health care costs to the development pattern and the energy use pattern of the last 20 years -- from air pollution to deforestation to acid rain and water shortage. In the face of these challenges new systems of training and social security will have to be devised, and new environmental policies and technologies will have to be introduced with the goal of growing your economy while improving the environment.

Everything I know about the intelligence, the ingenuity, the enterprise of the Chinese people and everything I have heard these last few days in my discussions with President Jiang, Prime Minister Zhu and others give me confidence that you will succeed.

As you build a new China, America wants to build a new relationship with you. We want China to be successful, secure and open, working with us for a more peaceful and prosperous world. I know there are those in China and the United States who question whether closer relations between our countries is a good thing. But everything all of us know about the way the world is changing and the challenges your generation will face tell us that our two nations will be far better off working together than apart.

The new century

The late Deng Xiaoping counselled us to seek truth from facts. At the dawn of the new century, the facts are clear. The distance between our two nations, indeed, between any nations, is shrinking. Where once an American clipper ship took months to cross from China to the United States, today, technology has made us all virtual neighbours. From laptops to lasers, from microchips to megabytes, an information revolution is lighting the landscape of human knowledge, bringing us all closer together. Ideas, information, and money cross the planet at the stroke of a computer key, bringing with them extraordinary opportunities to create wealth, to prevent and conquer disease, to foster greater understanding among peoples of different histories and different cultures. But we also know that this greater openness and faster change mean that problems which start beyond one nation's borders can quickly move inside them -- the spread of weapons of mass destruction, the threats of organised crime and drug trafficking, of environmental degredation, and severe economic dislocation. No nation can isolate itself from these problems, and no nation can solve them alone. We, especially the younger generations of China and the United States, must make common cause of our common challenges, so that we can, together, shape a new century of brilliant possibilities.

Security in Asia

In the 21st century -- your century -- China and the United States will face the challenge of security in Asia. On the Korean Peninsula, where once we were adversaries, today we are working together for a permanent peace and a future freer of nuclear weapons. On the Indian subcontinent, just as most of the rest of the world is moving away from nuclear danger, India and Pakistan risk sparking a new arms race. We are now pursuing a common strategy to move India and Pakistan away from further testing and toward a dialogue to resolve their differences. In the 21st century, your generation must face the challenge of stopping the spread of deadlier nuclear, chemical, and biological weapons. In the wrong hands or the wrong places, these weapons can threaten the peace of nations large and small. Increasingly, China and the United States agree on the importance of stopping proliferation. That is why we are beginning to act in concert to control the world's most dangerous weapons. In the 21st century, your generation will have to reverse the international tide of crime and drugs. Around the world, organised crime robs people of billions of dollars every year and undermines trust in government. America knows all about the devastation and despair that drugs can bring to schools and neighbourhoods. With borders on more than a dozen countries, China has become a crossroad for smugglers of all kinds. Last year, President Jiang and I asked senior Chinese and American law enforcement officials to step up our cooperation against these predators, to stop money from being laundered, to stop aliens from being cruelly smuggled, to stop currencies from being undermined by counterfeiting. Just this month, our drug enforcement agency opened an office in Beijing, and soon Chinese counternarcotics experts will be working out of Washington.

Cost of progress

In the 21st century, your generation must make it your mission to ensure that today's progress does not come at tomorrow's expense. China's remarkable growth in the last two decades has come with a toxic cost, pollutants that foul the water you drink and the air you breathe -- the cost is not only environmental, it is also serious in terms of the health consequences of your people and in terms of the drag on economic growth. Environmental problems are also increasingly global as well as national. For example, in the near future, if present energy use patterns persist, China will overtake the United States as the world's largest emitter of greenhouse gases, the gases which are the principal cause of global warming. If the nations of the world do not reduce the gases which are causing global warming, sometime in the next century there is a serious risk of dramatic changes in climate which will change the way we live and the way we work, which could literally bury some island nations under mountains of waters and undermine the economic and social fabric of nations. We must work together. We Americans know from our own experience that it is possible to grow an economy while improving the environment. We must do that together for ourselves and for the world. Building on the work that our Vice President, Al Gore, has done previously with the Chinese Government, President Jiang and I are working together on ways to bring American clean energy technology to help improve air quality and grow the Chinese economy at the same time.

But I will say this again -- this is not on my remarks -- your generation must do more about this. This is a huge challenge for you, for the American people and for the future of the world. And it must be addressed at the university level, because political leaders will never be willing to adopt environmental measures if they believe it will lead to large-scale unemployment or more poverty. The evidence is clear that does not have to happen. You will actually have more rapid economic growth and better paying jobs, leading to higher levels of education and technology if we do this in the proper way. But you and the university communities in China, the United States and throughout the world will have to lead the way.

International finance challenge

In the 21st century your generation must also lead the challenge of an international financial system that has no respect for national borders. When stock markets fall in Hong Kong or Jakarta, the effects are no longer local; they are global. The vibrant growth of your own economy is tied closely, therefore, to the restoration of stability and growth in the Asia Pacific region. China has steadfastly shouldered its responsibilities to the region and the world in this latest finanical crisis --helping to prevent another cycle of dangerous devaluations.

We must continue to work together to counter this threat to the global financial system and to the growth and prosperity which should be embracing all of this region.

In the 21st century, your generation will have a remarkable opportunity to bring together the talents of our scientists, doctors, engineers into a shared quest for progress.

Already the breakthroughs we have achieved in our areas of joint cooperation -- in challenges from dealing with spina bifida to dealing with extreme weather conditions and earthquakes -- have proved what we can do together to change the lives of millions of people in China and the United States and around the world. Expanding our cooperation in science and technology can be one of our greatest gifts to the future.